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Trade and Aid Policies: Their Impact on Economic Development in Mozambique

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  • Haaparanta, Pertti
  • Kerkela, Leena

Abstract

We study in this paper the impacts on the Mozambican economy of various trade agreements. We also estimate the impacts of aid and trade facilitation. Finally, we also conduct an in‐depth study of one sector, sugar production that our analysis shows to be potentially important in future for Mozambique. It is an important sector also for EU because of its current plans to liberalise the sector. Mozambique does not seem to gain from the trade agreements studied except from some agreements with EU. The same holds for the Doha round. At the same time trade facilitation has beneficial effects. Adverse impacts of aid (e.g. loss of competitiveness due real appreciation of the currency) are estimated to be very small and may be non‐ existent. Trade facilitation has large impacts on the production structure with new sectors growing and existing important sectors (except sugar) contracting. The results imply that aid‐for‐trade programmes have large potential but they must be planned carefully.

Suggested Citation

  • Haaparanta, Pertti & Kerkela, Leena, 2007. "Trade and Aid Policies: Their Impact on Economic Development in Mozambique," Conference papers 331650, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331650
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    References listed on IDEAS

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